Page 1 of 4 October 2014PRACTICAL FARMERS OF IOWA www.practicalfarmers.org
Horticulture
Winter Greens Production: Sales Revenue and Energy Costs
working together, always learning
PRACTICAL
Staff Contact:Liz Kolbe – (515) [email protected]
Cooperators:•Lee Matteson and Rose Schick – Nevada
Funding By:CERES
Web Link:http://bit.ly/pfi_horticulture
Research
Lee Matteson and Rose Schick (left) operate Lee’s Greens in Nevada, Iowa. They use an insulated germination room (right) to start tomatoes and herbs for indoor production.
In a NutshellWe compare the energy use of winter high tunnel production to the product revenue during the first season of operation.
• Greenhousesandhightunnelsallowfarmerstoextendthegrowingseason.
• Greenhousesandhightunnelscanincreaserevenuepersquarefoot.
• Managedproperly,theincreasedrevenuecanoffsettheexpenseofadditionalinfrastructure.
• Inthefirstwinterofproduction,Lee’sGreenswasabletokeeptheirrevenueabovetheirenergycosts.
• Propanewasthebulkoftheenergyexpenditure.
ProjectTimeline:September2013–January2014
About the Cooperators
Lee’sGreens,locatedinNevada,IA,isownedandoperatedbyLeeMattesonandRoseSchick.MattesonandSchickbothhaveacademicandpracticalbackgroundsinindoorhorticulturalproduction;thewinterof2013-2014wastheirfirstatLee’sGreens,theirnewjointventure.Inadditiontospecializinginwintergreenstheywillhaveearlygreenhousetomatoesandinfutureyears,outdoorproductionoffruitsandvegetables.
Background
GreenhousesandhightunnelsallowfarmerstopushthelimitsofIowa’sseasons,gettinganearlystartandalateendtotheproductionwindow.Practical
Farmersandotheragriculturalresearchprogramshavestudiedtheeconomicreturnsandproductionfeasibilityforavarietyofcropsingreenhouses(Worley,2009-2012).Overwhelmingly,thesestudiesfindthatusingahightunnelorgreenhousecanincreaserevenuepersquarefoot,andifmanagedproperlytheincreasedrevenuecanoffsettheexpenseofadditionalinfrastructure(Butler,2013;ChaseandNaeve,2012;BlomgrenandFrisch,2007;McLaskey,2011).
LeeMattesonandRoseSchickofLee’sGreensarepushingtheirgreenhousesharderthanmost,producingleafygreensfordirectmarketsincentralIowathroughoutthewinter.Thewinterof2013-2014wasLee’sGreens’firstyearinproduction,andwasalsothecoldestwinter(bysummationofheatingdegree
days)since1978(ISU,2014).Thebitingcoldcoincidedwithanunprecedentedspikeinpropaneprices,whichpeakedat$4.70/galinIowaduringJanuary2014,morethandoublinganyseasonalpriceforthelast10years(USEIA,2014).
Lee’sGreenssharedtherevenuedatafromtheirfirstwinterinproductionwithPracticalFarmersalongwiththeirmonthlyexpensesforpropane,water,andelectricityusedfortheirgerminationroomandfourgreenhouses,whichoccupyover12,000ft2.
Theobjectiveofthisprojectwastocomparetheenergyuseofwinterhightunnelproductiontotheproductrevenueduringthefirstseasonofoperation.
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Method
MattesonandSchickprovidedPracticalFarmerswiththeirmonthlyrevenuebycropandCSAsharesaswellasmonthlyenergyspendingdatafromSeptember2013–January2014.Propanewasreportedbybulkpurchase,whichlinedupwithmonthlyreportingofelectricity,water,andrevenue.Thefourgreenhousesaredripirrigatedandheatedthroughthesoil;electricityusedatthefarmwasforthelightsinthesmall,insulatedgerminationroominthepackhouse.
Results and Discussion
Forthreeofthefivemonthsdatawasreported,Lee’sGreensrevenuefromleafygreensoutpacedtheexpensesfromwater,electricity,andpropane(Figure 1).ThelargestmarginwasinOctober,with$5,139ofnetrevenue.ThelargestmonthofrevenuecameinNovember,with$8,204(Figure 2).Lettucemixledsaleseverymonth,followedconsistentlybyspinachandredkale;arugulaandCSAsharessaleseachmadeamonthlystandoutinOctoberandNovember,respectively.SalesofCSAsharesinNovemberareparticularlynotablebecauseitisrevenueforfutureproducedeliveries;thusthehighNovemberrevenuemayhavecontributedtothelowerreportedrevenueinDecemberandJanuary.Becausethisyearwastheirfirstinproduction,thefirstmonthofreportedexpenseshadnorevenue–infutureyearsthatrevenuegapwillbefilled.
Theenergyexpendituresweredominatedbypropanepurchases.Figure 3showsthemagnitudeofdifferencebetweenpropane,electricity,andwater;thecostofpropaneinJanuarywasmorethanalltheotherenergyexpenditurescombined.Thissignificantjumpinexpensewasduetothehistoricallycoldwinterandhighpropaneprices.InJanuary2014Lee’sGreenshadtobuyanadditional900gallonsofpropaneat$4.64/gal(Figure 4).IfpropanepriceshadnotspikedastheydidinJanuary,Lee’sGreenswouldhavesavednearly$3,000ontheirpropanepurchasethatmonth.
Thoughnotincludedintheanalysis,Lee’sGreens’deliverymileagetotaled6,170miles,equalto$3,455infederalmileagereimbursement($0.56/mi).Intermsofenergyused,however,thepropaneuseforthewinterwasanestimated15timesthatofgasolinefordeliveries.
Infutureyearsthewintergreenswillbeprecededbyatomatocrop,whichisexpectedtoproducehigherrevenuewith
lessenergycostthanthewintergreens,furtherincreasingtheannualrevenuemargin.
Conclusions and Next Steps
Intheirfirstwinterofproduction,Lee’sGreenswasabletokeeptheirrevenueabovetheirenergycosts.Propanewasthebulkoftheenergyexpenditure,unsurprisingduringoneofthecoldestwintersinIowa’shistorycoupledwithrecordpropaneprices.“Thisyearkindofthrewusforaloop,withthehighpropaneprices,”saidco-ownerandgrowerRoseSchick.
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Sep-13 Oct-13 Nov-13 Dec-13 Jan-14
Total Energy Expense and Sales Revenue
ExpensesRevenue
Figure 1
$0.00
$500.00
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$1,500.00
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Oct-13 Nov-13 Dec-13 Jan-14
Revenue by Crop
LettuceMix
Spinach
RedKale
Arugula
GreenKale
SwissChard
Radishes
CSA
Romaine
Figure 2
“Wedidacouplelittletrickstosavesomemoneyonpropane–wecleanedoutsomebedsthatweredoneandjustleftthemcold,thendelayedplantingtheearlytomatoesbytwoweeks,”saidMatteson.“OurgoalfortomatoeswastohitthefirstofMay,givingusallofMayandJunebeforeanyoneelsegetstomatoes.Youcanplantearlier[thanFebruary],butthecoldandlightwillholdthemback.”
Anothertricktoefficientuseofheatingisthesizeandshapeofthegreenhouse.“Withheating–thelargerthehouse,thebetter,”saidMatteson.Lee’sGreens’greenhousesareaswideaspossible(34’)
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withoutrequiringadditionalsupports.“Whenthehousesaresmaller,thecoldstartscreepinginfromthesidesduetoalargersurfaceareatovolumeratio,”saidMatteson.
Intheirfirstyearofproduction,Lee’sisdoingafewadditionalthingstoincreasecashflow,includingjams,herbsinthegerminationroomandsummervegetables,buteventuallytheyhopetomoveexclusivelytowardfruitsandoff-seasongreenhouseproduction.They’realsotrialing15differenttomatovarieties–grafted,artesian,heirloomandgreenhousevarieties.SaidMatteson,“We’vestruggledwithheirloomvarietiesinthegreenhouse.Theygetpowderymildew,theycrack–youdon’tgetnearlytheproduction.Restaurantswantthem,sowe’retryingafewgraftedvarietiesthisyear.”
SchickandMattesonareunfazedbyacomplexbedrotationscheduleandexpandingproduction.“Wecandoit,”said
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Sep-13 Oct-13 Nov-13 Dec-13 Jan-14Water $113.49 $138.79 $46.04 $29.18 $48.36
Electric $72.20 $182.75 $252.47 $359.69 $393.71
Propane $0.00 $0.00 $3,875.28 $2,198.01 $8,262.36
Energy Expenditure by SourceFigure 3
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Propane $/GalFigure 4
Schick,“wejustneedtoseeifit’sgoingtomakeusanymoney!”Todothat,theyemphasizebuildingrelationshipswithchefsandgettingchefsandbuyersuptoseetheirproduction.“It’simportantforchefstounderstandhowwe’regrowingthesegreensinthewinterandwhywestartrunningout.Theycanseewherewe’vejustharvestedandthatitwilltakesometimetogrowback.InSeptemberandOctoberweweregrowingarugulain1.5-2weeks;fromDecembertoFebruaryittakes4-6weeks,”saidMatteson.Schickechoed,“InJanuaryyoucanreallytellthingswon’tgrowasfastduetothedarkness.That’sthehardthingaboutworkingwithchefs–justasyougetthemhookedonyourproduct,thingsstartslowingdownandprettysoonwe’resaying,‘thanksforyourbusiness…hopeyourememberusnextyear!’”
Freshly harvested lettuce shares a bed with swiss chard (above). Below, beds have early tomatoes interplanted with lettuce, and green and red lettuce planted in the inside rows.
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References
Worley,Sally.2011.BlueGateFarmHighTunnels:Take3.PracticalFarmersofIowa.http://bit.ly/pfi_horticulture.
Worley,Sally.2012BlueGateHighTunnelsRecordKeepingProject:Winter,Season3.PracticalFarmersofIowa.http://bit.ly/pfi_horti-culture.
Worley,Sally.2010BlueGateHighTunnels:Take2.PracticalFarmersofIowa.http://bit.ly/pfi_horticulture.
Worley,Sally.2009HighTunnels:AreTheyLucrative?PracticalFarmersofIowa.http://bit.ly/pfi_horticulture.
Butler,Bryan.SuccessBasicsinHighTunnelProduction:ThreeMarylandCaseStudies.UniversityofMaryland,2013.
Chase,Craig,andLindaNaeve.2012.VegetableProductionBudgetsforaHighTunnel.Ames,IA:IowaStateUniversityExtension.http://store.extension.iastate.edu/Product/Vegetable-Production-Budgets-for-a-High-Tunnel-PDF.
Blomgren,Ted,andTracyFrisch.2007.HighTunnels:UsingLow-costTechnologytoIncreaseYields,ImproveQuality,andExtendtheSeason.UniversityofVermontCenterforSustainableAgriculture.http://www.uvm.edu/~susagctr/resources/HighTunnels.pdf
McLaskey,Steve.2011.FeasibilityofUnheatedLargeGutter-connectGreenhousesforWinterOrganicVegetableProductioninIowa.LeopoldCenterforSustainableAgriculture,IowaStateUniversity.
IowaStateUniversityofScienceandTechnology,IowaEnvironmentalMesonet.2014.ClimodatReports,Iowa,CentralDivision.http://mesonet.agron.iastate.edu/climodat/index.phtml?network=IACLIMATE&station=IAC005&report=18
U.S.EnergyInformationAdministration.2014.WeeklyIowaPropaneResidentialPrice.http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=W_EPLLPA_PRS_SIA_DPG&f=W
PFI Cooperators’ Program
PFI’sCooperators’Programgivesfarmerspracticalanswerstoquestionstheyhaveabouton-farmchallengesthroughresearch,record-keeping,anddemonstrationprojects.TheCooperators’Programbeganin1987withfarmerslookingto save money throughmore judicious use of inputs. If you are interested in conducting an on-farm trial contact
StefanGailans@[email protected].